-State’s S&R revenue is likely to increase by 19.12% in 2010-11 compare to 2009-10
-Unofficial estimate of the state’s realty market size Rs.83000/- crore
Though the experts are expecting a minor or medium scale correction in Gujarat’s realty market due to sky rocketed property prices in last two years but the state government is expecting a very good growth in the state’s realty market in the current financial year which will end in March 2011, and expects sizable rise in stamp duty & registration(S&R) fee income of the state exchequer.
The last seven months figures of S&R fee collection have remained quiet impressive and state’s realty market is likely to touch the Rs.50000/- crore official transaction marks by the end of this financial year which will be record breaking. Last year(2009-10) the official volume state’s transaction was Rs.42033/- crore. The State Revenue department received whopping Rs.2480/- crore S&R revenue last year. The current S&R rate in the state is 4.9% stamp duty plus 1% registration fee(total 5.9%) considering this and the state’s S&R revenue collection the state’s official reality market remained to Rs.42033/- crore last year. While for the current financial year(2010-11) the projection have been made of more then Rs.2700/- crore of S&R revenue.
So far in passed seven months (April to October) the State Government has earned Rs.1726.21/- crore, mostly quiet higher then the monthly targets. Considering the seven month’s Rs.246.59/- crore average collection in remaining five months(Nov to March) the state government is easily likely to earn Rs.1232.93/- crore more, reaching the total revenue collection mark to Rs.2959.14/- crore and the reality market size to record breaking Rs.50154.92/-crore.
The number of property development projects had increased by 25% last year. The total revenue growth of stamp duty and property registration had increased by 37.27% in 2009-10 against the 22.77% negative growth of 2008-09. In 2009-10 the state government had earned Rs2139.96 crore as stamp duty and registration fees on property transactions, total earning on stamp and registration fees was Rs2480/- crore, which was 1558.89/- crore in 2008-09.
However the year of 2007-08 was the best year for state’s realty market in last 10 years as it had a growth of 43.53% and income of Rs2018.43 crore. Compared to year 2007-08 there was 22.77 negative growth in year 2008-09. State’s S&R revenue is likely to increase by 19.12% in 2010-11 compare to 2009-10.
Ahmedabad was the biggest earner of stamp and registration fees for the state government in terms of value last year, Rajkot, Vadodara and Surat are also likely to register impressive growth. The trend is likely to be continued this is year too.
A senior government official, said that, “compared to 2008-09 year’s negative growth we last year had impressive 37% rise in the government income on property transactions. However despite the impressive increase in the volume this year, the percentile growth will be less then last financial year.’’
A well known realty player and observer of the industry told that, “the S&R revenue collection of the state government does not reflect the full size of the real estate industry of the state as everyone knows that hardly any transaction have been valued at actual price. Despite Government’s many initiative most of the realty transaction have been under valued to save the tax. At present around 40% of value of transaction never been mention on the sale documents which means a huge loss to government also. At present Gujarat’s realty market can be estimated to more then Rs.83000/- crore.’’